Ascendis Health was once a darling of the JSE. It was listed in 2013. Its aggressive global plan nearly led to collapse, but now The Ascendis Health Turnaround is aiming to rectify past mistakes. Excessive debt fueled the company's strategy. The plan to create a health giant faltered. Acquisitions lacked synergy, and offshore assets underperformed.
The massive debt burden proved unsustainable. Financial pressures compelled Ascendis to give up international assets. This happened during a painful restructuring. Market sentiment became very negative. Its share price was feared to hit zero. The company's future looked grim. It faced leadership issues and major losses.
New Leadership and the Ascendis Health Turnaround
Fund manager ACN Capital's arrival marked a change. Its founder, Carl Neethling, is now CEO. This began the challenging Ascendis Health turnaround. In late 2022, the firm nearly lost its medical devices unit. It secured emergency funding just hours before.
Neethling’s team took drastic measures. They dismantled the bloated head office. They cut costs and top executive salaries. This yielded R38m in annual savings. They also reduced reliance on consultants. This saved another R38m per year. These steps were central to the Ascendis Health turnaround. A new bonus structure was also introduced.
Key Successes in the Ascendis Health Turnaround
A key success was selling Ascendis Pharma. It sold to Austell Pharmaceuticals for R410m. This deal secured an extra R57m for shareholders. The company also secured a vital banking facility. This restored credibility with lenders.
Today, the successful turnaround of Ascendis Health is clear. The company is now debt-free and profitable. It is a South Africa-focused investment firm. Net Asset Value (NAV) is the new benchmark. It was R659m as of December 31, 2024.
The firm has two core divisions. Consumer Health makes up 65% of NAV. It includes brands like Solal and Vitaforce. Medical Devices make up 35% of NAV. This segment is showing positive momentum. Mergers and acquisitions show recovery and expansion.
Management has increased its stake to 47%. This has led to delisting speculation. The stock trades at a discount to its NAV. The company now focuses on stable value creation. This completes the Ascendis Health turnaround story.